In April 2017, Spandana Sphoorty raised $270 million, facilitating its exit from CDR after seven years. Around $100 million will come in the form of equity capital from a Kedaara Capital-led consortium including Ontario Teachers’ Pension Plan, and the rest in the form of debt capital from IndusInd Bank Ltd, Yes Bank Ltd and ICICI Bank Ltd.

Spandana has an over Rs2,400 crore portfolio, spread across 620 branches in 14 states with 1.2 million borrowers and a workforce of 3,500.

“Microfinance as a business has evolved a lot since it took shape in the late 90s and it has proven beyond doubt that it can withstand all adversities. Borrowers have always stood by MFIs. Raising $100 million equity after demonetization and Rs400 crore from Aditya Birla Sun Life MF is a testimony to this,” said Padmaja Reddy, managing director at Spandana Sphoorthy.

Aditya Birla Sun Life MF, which is part of Aditya Birla Sun Life Asset Management Co., manages over Rs1.8 trillion in assets.

The transaction marks the resurgence of interest from capital markets in the microfinance sector in the wake of demonetisation.

“Historically, we have been extremely cautious about taking MFI credit exposure. Our investment in the company is guided by its strong fundamentals and improving industry scenario,” said a spokesperson at Aditya Birla Sun Life Mutual Fund.